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Do a search for that model on Ifixit.com

I did I a quick search and they have a guide to replacing the hard drive. In the comments, there are lots of recommendations fir hard drives that work. The largest I saw listed on there was 6 GB.
 
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I just installed a regular off the shelf hard drive (I formatted it to HFS like the original one was), reset the Time Capsule and it took care of formatting and everything.
 
I just installed a regular off the shelf hard drive (I formatted it to HFS like the original one was), reset the Time Capsule and it took care of formatting and everything.
you got lucky then... mine did not recognize the hard drive. it kept saying there is "hardware error".
 
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